DJIA Index is congruent with presidential
election cycle historical standards with market falling in the post
election year of 1913. You will later notice how human mores and morals have
changed since this era.
The onset of World War I was reason enough to
close the stock market for several weeks. That is why there are no data
points in late 1914. You will later see that wars are no longer reason
enough for closing the market.
The market anticipated the 1913-14 recession
by about five months, which is close to the expected anticipation cycle of
six-months. You will later see how the market does not always successfully
anticipate recessions - at least not directly.
The market did not like the income tax
amendment in early 1913; nor was it impressed with the creation of the
Federal Reserve. The market was most likely concerned about how much
interference with the natural Darwinian laws from these newly formed
non-producing factions.
One reason the Indicant is performing
exceedingly well against Buy&Hold is ten years of flat
market performance with pronounced cyclical behavior. You will later see
that Buy&Hold is the best model during bull markets. The problem is that
buy and hold has to endure bear markets. Also, some bear markets last an
entire generation of people. It is that risk that provides the award. The
market does not and should not show compassion for those who blindly
engage the risk. Blind beneficiaries of stock market success or simply
lucky, which in the long run has a way of balancing it out with an equal
or even unequal amount of bad luck.
Wall Street folks are money people. As you
can see from the chart, they had no idea of how much money was about to be
delivered by the first production line. Money folks are simply geared
daily to their bank balances and earnings statements. Items such as
productivity, strategic planning, and organizational effectiveness exceed
their short-term aptitudes. These items eventually lead to profound
financial success. Once the dollars are delivered, the money folks simply
count it and usually grant credit to successful marketing. Productivity is
a primary driver to economic growth and prosperity, but money folks do not
comprehend or participate in that process. They only count it.
The bullish seasonality (pink) is incongruent
to historical standards during the bearish market periods and bearish
seasonality (white) is also incongruent to historical standards during
bullish periods.
